The US Department of Education sent a letter on October 24, 2007 to 55
colleges with at least $10 million in FFELP loan volume with at least
80 percent of their volume with a single lender. 48 of the 55 had more than
95 percent of their volume with a single lender. This was a follow-up
to an earlier request for information to 921 colleges with at least 80
percent of loan volume with a single lender. The list of 55 colleges
is not comprehensive, as there are about 100 colleges that satisfy the
same criteria (some with 100% of loan volume through a single lender)
that aren't on the list. Also, some of the colleges on the list have
less than $10 million in FFELP loan volume. Some of the colleges have
multiple campuses, and it is unclear why one campus was chosen over
the others.
The Department also sent a letter (see below) to 23 of the lenders
that originate loans at these colleges.
Of the lenders that serve the 55 colleges, only two are missing from
the list of 23 lenders: SC Student Loan Corporation (5 colleges) and
Sallie Mae (19 colleges).
The letter, the list of 55 colleges and a list of 23 lenders that
also received information requests appear below. Some of the colleges
have multiple campuses.
;;; ********************************
;;; Letter *************************
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October 24, 2007
Dear [Lender Representative]:
As part of our compliance efforts related to borrower choice and
lender inducements in the Federal Family Education Loan (FFEL)
Program, and in accordance with our authority under the Higher
Education Act (HEA) and the U.S. Department of Education.s
regulations, we are requesting that your company provide us with the
information listed below. This request relates to any agreement,
written or otherwise (including emails), that you, or any of your
affiliates, have or had with schools that participate in the FFEL
Program or with any individual at a school or any affiliate of a
school. An affiliate of a school includes, among other entities,
alumni, athletic, cultural, and professional organizations or
associations.
Under the HEA, a student who wishes to borrow under the FFEL Program
and who attends (or plans on attending) a school that participates in
the FFEL Program must be allowed to choose their FFEL lender. A school
may not refuse to certify a FFEL loan based upon the borrower.s choice
of lender or guaranty agency. A school may not steer or coerce a
borrower, directly or indirectly, to choose a particular lender. A
FFEL Program lender may not have any agreement, or engage in
activities, with a school that prevents or impedes a borrower from
exercising the right to choose a FFEL lender. Also, under the HEA, an
eligible lender or guaranty agency may not offer, directly or
indirectly, points, premiums, payments, or other inducements to secure
applicants for loans made under the FFEL Program.
The information to be provided must include any activity from July 1,
2005 to the present.
You must provide the requested information for any relationship your
company has or had with any school. However, since your company
provided 80 percent or more of the FFEL Program loans made to students
and parents for attendance at the schools included on the listing
attached to this letter, you must affirmatively respond if you do not
and did not have agreements with or transactions between any of the
schools listed.
Please provide the following
1. Lender School Agreements: The name of the school, individual, or
school affiliate with which you, or one of your affiliates, has or
had an agreement, whether in writing or not. If in writing you must
submit a copy of the agreement. If the agreement is not formalized,
provide copies of meeting notes, correspondence, emails, etc. that
relate to the agreement. In all instances include the date the
agreement was entered into, the time period covered by the
agreement, and the terms of the agreement including any benefits or
services offered or provided by either party under the
agreement. Finally, provide contact names, phone numbers, and email
addresses for your school and for the lender or guaranty agency
associated with the agreement.
2. Remuneration: A listing of any school affiliated individuals who
were provided by your company (or by any of its subsidiary
organizations or organizations with which it has a contractual
relationship) stocks, warrants or other financial interest in your
company or any other entity.
3. Financial Transactions: A listing of any financial transactions
between your company (or any of its affiliates) and a school if the
transaction was not related to normal business processes. Normal
business processes include student loan certifications, loan and
other financial aid disbursements, transactions related to payroll,
checking and other deposit accounts, and deposits to or withdrawals
from existing loan accounts. The listing must include the date and
amount of the transaction and a notation of the purpose of the
transaction.
4. Copies of your (and your subsidiary organizations or organizations
with which you have a contractual relationship) written policies
and procedures, including the dates they were established, for
ensuring that you are in compliance with all requirements of the
law and regulations related to the FFEL Program. Detailed
information must be provided for policies and procedures related to
the prohibited inducement requirements of the law and regulations.
5. Decision Making: A description of how decisions are made by your
company regarding incentives related to student loans that may be
provided to borrowers and institutions.
The requested information must be submitted to the address below no
later than November 30, 2007:
U.S. Department of Education
Federal Student Aid
Program Compliance
Union Center Plaza
830 First Street, NE, Room 81G1
Washington, DC 20002
Attn: Jackie Bannister
Upon receipt and review of the information provided, we may request
additional information or schedule a program review to determine if
there has been a violation of the statutory and regulatory
requirements related to borrower choice or prohibited
inducements. Should you have any questions concerning this request,
please call Ann Marie Fusco.
Thank you for your cooperation in this matter.
Sincerely,
Victoria Edwards
Chief Compliance Officer
Program Compliance
Lender List
Access Group
Bank of America
Bank of NY ELT College Solutions
Bank One
Citibank, Student Loan Corp.
Citizens Bank
College Foundation Inc
Connecticut Student Loan Foundation
JP Morgan Chase Bank
New Hampshire Higher Ed Loan Corp.
Northstar Guarantee
Suntrust Bank
Union Bank ELT University of Nebraska
University of San Francisco
VT Education Loan Finance Program
Western Univ. of Health Science
BNY ELT College Board
Carnegie Insurance Company
ED America
Kentucky Higher Ed Student Loan Corp.
Pittsburgh National Corp (PNC)
RISLA/Rhode Island Student Loan Authority
Wachovia Education Finance Inc.
School List
University of North Carolina at Pembroke
Delaware State University
William Paterson University of New Jersey
Faulkner University
Mass. College of Pharmacy & Health Sciences
Shaw University
University of Vermont and State Agricultural College
Champlain College
American Career College
Suffolk University
Castleton State College
University of Findlay (The)
Rowan University
Georgia College & State University
New York Chiropractic College
Colorado Technical University
Western Kentucky University Bowling
Vermont Law School
Georgia Institute of Technology
Life Chiropractic College
New York Medical College
University of Nebraska
Richard Stockton College of New Jersey (The)
Everest Institute
Charleston Southern University
Marymount University
University of North Carolina - Chapel Hill
Western Connecticut State University
Liberty University
University of Rochester
Johnson & Wales University
University of Virginia
Villa Julie College
Universal Technical Institute
Universal Technical Institute
Fayetteville State University
Francis Marion University
Trident Technical College
Meredith College
La Salle University
Vatterott College
Southern New Hampshire University
University of North Carolina - Charlotte
Western University of Health Sciences
College of New Jersey
Medical University of South Carolina
Springfield College
Norwich University
Western Governors University
Seton Hall University
University of Scranton
University of San Francisco
Greenville Technical College
Bryman School (The)
High-Tech Institute